Bitcoin's market share hits 2-year high

Bitcoin's market share has reached a two-year high

The size of the share of the first cryptocurrency is an indicator of the market cycle and investor sentiment

Bitcoin's market share has reached a two-year high, surging to 52.76% on the night of October 21, the highest level since April 2021, as reported by TradingView. The total market capitalization of the cryptocurrency market now stands at $1.16 trillion, with Bitcoin's capitalization exceeding $600 billion.

The dominance of Bitcoin, or its share in the total market capitalization of all cryptocurrencies, often fluctuates in a cyclical manner. During bearish phases in the crypto industry, Bitcoin's dominance tends to increase, while during bullish periods when alternative cryptocurrencies (altcoins) outperform Bitcoin, its dominance tends to decline. This "dominance" index of the leading cryptocurrency serves as a valuable indicator of the market cycle and investor sentiment.

The recent breach of the 50% mark in Bitcoin's market share, for the first time in two years, holds significant meaning. Analysts have noted that this phenomenon is a consequence of the market's unique dynamics, occurring approximately every four years around the time of a Bitcoin halving event. This trend can persist for six months to a year following the halving. The increasing dominance of Bitcoin suggests that long-term investors are favoring it over altcoins, reallocating their funds and utilizing new capital inflows primarily for BTC investments.

Bitcoin halving, a programmed reduction in the production of new bitcoins distributed to miners, is a key factor in this cyclical pattern. In the early years of the cryptocurrency industry, Bitcoin's dominance was over 80%, but it dropped to a historic low of 35% in January 2018 after a bull market.

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